Article XII. National Economy and Patrimony
A grant by the government through
Colmenares, et al vs. Duterte
Facts:
The petitioner assailed the constitutionality of a
Memorandum of Agreement regarding a loan
between China and Philippines. The process
involved approvals from various Philippine
government agencies including the Department
of Finance, National Irrigation Authority,
Metropolitan Waterworks and Sewerage
System, and the Bangko Sentral ng Pilipinas.
Petitioners claim that conditions for loan
disbursement, especially payments to Chinese
contractors, go against the "Filipino First" policy
and procurement laws
Issue: WON the loan agreements are
constitutional.
Ruling: Yes. The court asserts that the loan
agreements are consistent with constitutional
policies. The court acknowledges a hybrid
procurement approach but concludes that it
aligns with relevant laws and regulations.
Despite concerns about the exclusion of Filipino
contractors, the court declines to invalidate the
loan agreements, emphasizing stability and
predictability in the legal system for the
country's economic growth.
Lee Hong Kok vs. David
Facts:
Respondent acquired lawful title to a parcel of
land pursuant to his miscellaneous sales
application. The Director of Lands made an
order of award and for issuance of a sales
patent.
The Undersecretary of Agriculture and Natural
Resources issued a Miscellaneous Sales Patent
pursuant to which an OCT was issued by the
Register of Deeds of Naga City to David.
Petitioners Lee Hong Hok et al. claim that the
Title of Respondent David over the land is
private property for it was formed through
accretion and should be Null and Void.
The CA found no legal justification for nullifying
the right of David over the disputed land arising
from the grant made in his favor by appropriate
public officials.
Issue: WON the Government has the authority
to dispose of the said land.
Ruling: Yes.
duly competent public officials cannot be
disregarded and may not be disposed of by the
state. The legality of the grant is a question
between the grantee and the government. A
void certificate of title issued according to a void
patent can only be canceled by the government.
Cariño vs. Insular Government of the Philippine
Islands
Facts:
Mateo Cariño filed his petition in the court of
Land Registration praying that he be granted to
title of a parcel of land consisting of 40 hectares.
He and his ancestors had held the land as
owners for more than 50 years, which he
inherited under Igorot customs. There was no
document of title issued for the land when he
applied for registration.
The government contends that the land in
question belonged to the state. Under the
Spanish Law, all lands belonged to the Spanish
Crown except those with permit private titles.
Moreover, there is no prescription against the
Crown.
Issue: WON the land in question belonged to
the Spanish Crown under the Regalian Doctrine.
Ruling: No. Law and justice require that the
applicant should be granted title to his land.
It might perhaps, be proper and sufficient to say
that when, as far as testimony or memory goes,
the land has been held by individuals under a
claim of private ownership, it will be presumed
to have been held in the same way from before
the Spanish conquest, and never to have been
public land.
La Bugal-B’laan vs. Ramos
Facts:
Petitioner assailed the constitutionality of RA
7942 as well as its implementing rules, and the
Financial and Technical Assistance Agreement
(FTAA) between the government and Western
Mining Corporation (Philippines), Inc. (WMCP)
to be declared unconstitutional on grounds that
they allow fully foreign-owned corporations like
WMCP to exploit, explore and develop
Philippine mineral resources in contravention of
Article XII Section 2 paragraphs 2 and 4 of the
Charter.
The Court En banc ruled that certain provisions
of RA 7942 and its FTAA as unconstitutional.
Issue: WON RA 7942 is constitutional.
Ruling: No, Section 2 of Article XII of the
Constitution does not allow foreign-owned
corporations to undertake mining operations
directly. They may act only as contractors of the
State under an FTAA; and the State, as the party
directly undertaking exploitation of its natural
resources, must hold through the government
all exploration permits and similar
authorizations.
JG Summit Holdings v CA
Facts:
The National Investment and Development
Corporation (NIDC) entered a joint venture
agreement (JVA) with Kawasaki for PHILSECO.
NIDC's interest eventually went to the National
Government, leading to the privatization of
PHILSECO. Kawasaki, exercising a right of first
refusal, acquired shares through Philyards
Holdings, Inc. (PHI). JG Summit protested the
bid, arguing PHILSECO's public utility status and
the violation of Filipino-foreign 60%-40%
capitalization.
Issue: WON under the 1977 Joint Venture
Agreement, is limited to 40% capitalization.
Ruling: No. The Court ruled PHILSECO isn't a
public utility, so the 40% limit doesn't apply. If
the foreign shareholdings of a landholding
corporation exceeds 40%, it is not the foreign
stockholders’ ownership of the shares that is
adversely affected but the capacity of the
corporation to own land. No law disqualifies a
person from purchasing shares in a landholding
corporation even if the latter will exceed the
allowed foreign equity, what the law disqualifies
is the corporation from owning land.
Bayan Muna Party-list et.al vs. President Gloria
Macapagal Arroyo
Facts:
This case is about the Joint Marine Seismic
Undertaking (JMSU) to conduct joint research
on the petroleum resource potential of the
South China Sea. The petitioners argued that
the JMSU allowed foreign corporations to
conduct large-scale exploration in areas owned
by the Philippines, in violation of the
Constitution.
Issue: WON JMSU is constitutional.
Ruling: No. JMSU is unconstitutional as it
violates the State's control over natural
resources which provides Section 2, Article XII of
the 1987 Philippine Constitution which
mandates that the exploration, development,
and utilization (EDU) of natural resources shall
be under the full control and supervision of the
State (REGALIAN DOCTRINE).
NCIP vs. Lepanto Consolidated Mining
Company and Far Southeast Gold Resources
Facts:
DENR executed a Mineral Production Sharing
Agreement (MPSA) with respondents that
allows them to mine operations within the
province of Benguet.
During the effectivity of MPSA, Congress
enacted RA 8371, otherwise known as the
Indigenous Peoples' Rights Act of 1997 (IPRA).
This requires as a precondition, the prior
certification of NCIP that any grant or renewal of
concession, license, or product-sharing
agreement does not involve an area that
overlaps with an ancestral domain and that no
certification shall be issued by the NCIP without
the free and prior informed and written consent
of the ICCs/IPs concerned.
Issue: WON the renewal of MPSA is exempt
from the Certification Precondition under the
IPRA.
Ruling: NO. The Court elucidated that the FPIC
and Certification Precondition under Section 59
of the IPRA are in accordance with the State's
policy to provide protection to the rights of
ICCs/IPs. It confirmed that respondents do not
have a vested right for the renewal of MPSA
under the same terms and conditions, as a
mining agreement partakes of a mere privilege
granted by the State.
Sta. Rosa Mining vs. Leido
Facts:
P.D. 1214 was issued requiring holders of
subsisting and valid patentable mining claims to
file a mining lease of application within one year
from the approval of the Decree.
Petitioner assails the constitutionality of P.D.
1983 as it amounts to a deprivation of property
without due process of law.
Issue: WON P.D. 1214 is constitutional.
Ruling: Yes. It is a valid exercise of the sovereign
power of the State, as owner, over the lands of
the public domain, of which the petitioner’s
mining claims still form a part.
San Miguel Corporation vs. CA
Facts:
DOLE Iligan District Office conducted a routine
inspection and discovered that there was
underpayment of regular Muslim holiday pay to
its employees.
Macaraya, Director IV of DOLE Iligan issued a
compliance order directing SMC to consider
muslim holidays as regular holidays and to pay
both Muslim and non-Muslim employees
holiday pay within 30 days from the receipt of
the order.
Petitioner contends that non-Muslim employees
are not entitled to regular Muslim holiday pay
and is contrary with the provision of P.D 1083.
Issue: WON non-Muslim employees of SMC are
entitled to regular Muslim holiday pay.
Ruling: Yes. P.D 1083 Provides that the
provisions under it shall be applicable only to
muslims. However, there should be no
distinction between muslim and non-muslims as
regards payment of the benefits for muslim
holiday.
Republic vs. Bantigue Point Development
Corporation
Facts:
Respondent filed with the RTC of Rosario,
Batangas an application for original registration
of title over a parcel of land located at San Juan,
Batangas. The respondent presented the Tax
Declaration, Deed of Absolute Sale in favor of
the respondent, Certification from DENR and
CENRO that the lot in question is within
alienable and disposable zone. The Republic,
petitioner, however opposed.
Issue: WON the lot in question is alienable and
disposable land of the public domain
Ruling: The Court remanded the case. Also
stating that the Certification from CENRO is not
a sufficient proof that the lot in question is
alienable and disposable land of the public
domain.
Ssssssssssssssssssssssssssssss
Alvarez vs. PICOP
Facts:
PICOP filed to DENR an application to have its
Timber License Agreement be converted into an
Integrated Forest Management Agreement.
Issue: WON PICOP application for IFMA in line
with the provision of Sec 2, Article XII of the
Constitution?
Ruling: No. PICOP that it is applying for an IFMA
with a term of 2002 to 2027. Section 2, Article
XII of the Constitution allows exploitation
agreements to last only "for a period not
exceeding twenty-five years, renewable for not
more than twenty-five years." PICOP, thus,
cannot legally claim that the project’s term
started in 1952 and extends all the way to the
present.
Ideals vs. PSALM
Facts:
PSALM is a GOCC mandated by RA 9136 (Electric
Power Industry Reform Act of 2001 or the EPIRA
Law) to manage the orderly sale, disposition,
and privatization of the assets of the National
Power Corp. (NPC) over a 25-year period. In the
discharge of its said duties, PSALM held a public
bidding for the sale of a hydroelectric power
plant. After evaluating the submitted bids,
PSALM awarded the sale to K-Water, a Korean
company.
Petitioner alleged that PSALM violated the
constitutional provisions on the appropriation
and utilization of water as natural resource, as
implemente by the water code of the
Philippines limiting water rights to Filipino
citizens and corporations which are atleast 60%
Filipino-owned.
Issue: WON the acquisition by K-Water of the
AHEPP in valid.
Ruling: Yes. Foreign ownership of hydropower
plants are not prohibited under existing laws.
Hydropowerplants are among those
infrastracture projects which even wholly-
owned foreign corporation are allowed to
undertake under the amended Build-Operate-
Trasfer Law. (BOT LAW R.A. No. 7718)
Director of Lands vs Aquino
Facts: except agricultural lands, came into effect. As a
result, the land was deemed to have become
Abra Industrial Corporation (AIC), a duly
the private property of Benguet and Atok,
registered corporation established for the
excluding any claims of ownership by the
purpose of setting up a cement factory, claims
applicants.
be the owner of the whole 70-hectare area.

It filed in the then Court of First Instance of Abra

an application for registration in its name of said Apex Mining Co., Inc. v. Southeast Mindanao
parcels of land alleging that it has been in the Gold Mining Corp.
possession of his predecessors.
Facts:
Petitioner contends that AIC had no registerable
The case involves the “Diwalwal Gold Rush
title and that the highly mineralized parcels of
Area”, a rich tract of mineral land located inside
land applied for were within the Central
the Agusan- Davao-Surigao Forest Reserve in
Cordillera Forest Reserve which had not yet
Davao del Norte and Davao Oriental.
been released as alienable and disposable land
pursuant to the Public Land Law. Since then, several groups, large corporations,
small-scale mining operations, Cooperatives,
Issue: WON the forest land reserves in this case
and other entities have been vying for the rights
is covered in the Regalian Doctrine.
to extract minerals from the area.
Ruling: Yes. Pursuant to this constitutional
PGMA issued Proclamation number 297. This
provision, the land must first be released from
proclamation excluded an area of 8,100
its classification as forest land and reclassified as
hectares located in Monkayo, Compostela
agricultural land in accordance with the
Valley, and proclaimed the same as mineral
certification issued by the Director of Forestry.
reservation and as environmentally critical area.
This is because the classification of public lands
Issue: WON the issuance of Proclamation No.
is an exclusive prerogative of the executive
297 can outweigh claims over the Diwalwal Gold
department of the government and not of the
Rush Area.
courts. Moreover, a positive act of the
government is needed to declassify a forest land Ruling: YES. Upon the effectivity of the 1987
into alienable or disposable land for agricultural Constitution, the State assumed a more
or other purposes. dynamic role in the exploration, development
and utilization of the natural resources of the
country. With this policy, the State may pursue
Republic of PH vs. CA full control and supervision of the exploration,
development and utilization of the country’s
Facts:
natural mineral resources.
Jose Y. De La Rosa filed an application for the
registration of a parcel of land in Benguet
Province, consisting of nine lots. Republic of PH vs. T.A.N Properties, Inc.

Benguet Consolidated, Inc. and Atok-Big Wedge Facts:

Mining Company opposed the application,
T.A.N. Properties, Inc. (TPI) applied for
asserting their respective mineral claims over
registration of 54 hectares of land in Batangas
portions of the land. The Republic of the
City and the Republic opposed. TPI won in the
Philippines, through the Bureau of Forestry
RTC and CA level as these courts found that the
Development, also opposed the registration,
testimonies of its witnesses has proven open,
claiming that the land was part of the Central
continuous, exclusive and notorious possession
Cordillera Forest Reserve and not subject to
in the concept of an owner. (OCENPICO) The
alienation.
Supreme Court reversed these rulings as there
Issue: WON the land subject to the application was no valid proof that the land was alienable,
for registration is alienable and registerable. or that there was OCENPICO proven sufficiently.
Since, there was no OCENPICO, a corporation is
Ruling: The Supreme Court held that the land in
prohibited from owning alienable land of the
question was not alienable and registerable due
public domain. They can only hold these under
to its classification as mineral land. The mining
a lease.
claims of Benguet and Atok were found to have
been perfected before the 1935 Constitution's Issue: WON the land is alienable and disposable.
prohibition on the alienation of public lands,
Ruling: No, all lands not appearing to be clearly
of private dominion presumably belong to the
State. the presumption that the land subject of
an application for registration is alienable and
disposable rests with the applicant. In this case,
the certifications presented by the applicant
(from CENRO and Regional Technical Director of
the Forest Management Services) are not
sufficient. Under the DENR Administrative
Order, the CENRO can only issue a certificate for
lands 50 hectares and below and the PENRO for
above 50 hectares. These certifications have no
probative value.
Cruz vs. Secretary of DENR
Facts:
The petitioners assail certain provisions of the
Indigenous People’s Rights Act of 1997 (IPRA)
and its implementing rules and regulations (IRR)
on the ground that these amount to an unlawful
deprivation of the State’s ownership over lands
of the public domain as well as minerals and
other natural resources therein, in violation of
the regalian doctrine embodied in section 2,
Article XII of the Constitution.
Issue: WON certain provisions of IPRA
contravene the Constitution.
Ruling: No, the provisions of IPRA do not
contravene the Constitution. Examining the
IPRA, there is nothing in the law that grants to
the ICCs/IPs ownership over the natural
resources within their ancestral domain.
Ownership over the natural resources in the
ancestral domains remains with the State and
the rights granted by the IPRA to the ICCs/IPs
over the natural resources in their ancestral
domains merely gives them, as owners and
occupants of the land on which the resources
are found, the right to the small scale utilization
of these resources, and at the same time, a
priority in their large scale development and
exploitation.
Telecom vs COMELEC
Facts:
Petitioner Telecommunications and
Broadcasting Attorneys of the Philippines Inc
and GMA challenged the validity of Section 92
of BP 881 on the ground that:
a. It takes property without due process of
law and just compensation – taking
airtime from radio and televisions
without compensation.
b. It denies radio and television companies
equal protection of the law-it singles
out radio and televisions company to
provide air time.
c. It is in excess power given to COMELEC
to supervise or regulate the operation
of media communication or information
during election period-it is argued that
the power to supervise and regulate
given to COMELEC under Article IX-C of
the Constitution does not include power
to prohibit.
Issue: WON section 92 of BP 881.
Ruling: Yes. Petitioners claims are without merit.
All broadcasting companies, whether by radio or
tv is licensed by the government. Airwave
frequencies have to be allocated as there are
more individuals who want to broadcast than
there are frequencies to assign. A franchise is
this a privilege, subject to amendments by
Congress in accordance with the constitutional
provisions. Their flea for Section 92 (free air
time) and Section II of RA No. 6646 (ban on paid
political ads) should be invalidated would pave
the way for a return to the old regime where
moneyed candidates could monopolize media
advertising to the disadvantage of candidates
with less resources.
Republic vs. CA
Facts:
Respondent spouses, Juan and Juana De La Cruz
bought unregistered parcels of land particularly
lots 347 and 348 situated in San Pablo City. At
the time of the purchase, respondent spouses
were then natural-born Filipino citizens.
Spouses filed an application for registration of
title of the two 2 parcels of land before the
Regional Trial Court of San Pablo City.
Petitioners argues that respondents have
acquired Canadian citizenship through
naturalization to justify the registration thereof
in their favor.
Issue: WON the parcels of land constitute a
private land and should the title be granted.
Ruling: Yes. The parcels of land sought to be
registered no longer form part of the public
domain. They are already private in character
since private respondents' predecessors-in-
interest have been in open, continuous and
exclusive possession and occupation thereof
under claim of ownership. The law provides that
a natural-born citizen of the Philippines who has
lost his Philippine citizenship may be a
transferee of a private land up to 1,000 sqm if
urban, or 1 hectare in case of rural land, to be
used by him as his residence.
Zaragosa vs. CA
Facts:
Flavio Zaragoza Cano died intestate and was
survived by his four children. Private respondent
Alberta Zaragoza-Morgan filed a complaint with
CFI against his brother Florentino and Erlinda,
herein petitioners, for delivery of her
inheritance share, consisting of Lots 943 and
871, and for payment of damages.
She alleged that her father, in his lifetime,
partitioned the aforecited properties among his
four children. The shares of her brothers and
sister were given to them in advance by way of
deed of sale, but without valid consideration,
while her share, which consists of lots no. 871
and 943, was not conveyed by way of deed of
sale then. She averred that because of her
marriage, she became an American citizen and
was prohibited to acquire lands in the
Philippines except by hereditary succession. For
this reason, no formal deed of conveyance was
executed in her favor covering these lots during
her father’s lifetime.
Issue: Whether or not the partition inter vivos
by Flavio Zaragoza Cano of his properties, which
include Lots 871 and 943, is valid.
Ruling: YES. The Court held that it is basic in the
law of succession that a partition inter vivos
may be done for as long as legitimes are not
prejudiced. Art. 1080 of the Civil Code is clear
on this.
Osmeña vs. Osmeña
Facts:
Before her death, Chiong Tan Sy executed a last
will and testament in which she enumerated her
properties. The ancestral house was specifically
mentioned however the lots were not. The titles
of the lots were in the name of the
respondents’ father. Upon Ignacio’s death,
respondents transferred the title to their own
names.
Petitioner asserts that she is a co-owner of the
three litigated properties. She argues that the
two lots were her mother’s properties and were
part of the inheritance that she and her siblings
received upon their mother’s death and that the
placing of Ignacio’s name was done merely
because their mother is a Chinese national who
was prohibited by law to own land in the
Philippines.
The respondents assert their claim to the
disputed properties by virtue of the transfer
certificate title covering the lots issued in their
father’s name and a deed of sale signed by
petitioner herself, covering her share in the
ancestral house. Both trial court and CA
recognized the validity of the said documents
and rendered judgment in favor of the
respondents
Issue: WON the CA erred in giving credence to
the deed of sale and in holding that
respondents are the owners of the disputed
lots.
Ruling: No, Assuming arguendo that the litigated
lots were actually the properties of Chiong Tan
Sy and that the same was only put in the name
of the respondents' father because he was the
only Filipino citizen in the family at the time the
properties were purchased, this Court will not
consent to any violation of the constitutional
prohibition on foreign ownership of land.
Beurmer vs. Amores
Facts:
Petitioner, a Dutch National, and respondent, a
Filipina,. After several years, the RTC declared
the nullity of their marriage on the basis of the
former’s psychological incapacity. Consequently,
the petitioner filed for the dissolution of
Conjugal Partnership praying for the distribution
of the properties claimed to have been acquired
during the subsistence of their marriage.
The RTC rendered its decision dissolving the
parties’ conjugal partnership, awarding all the
parcels of land to respondent as her
paraphernal properties; the tools and
equipment in favor of the petitioner as his
exclusive properties, and the two houses co-
owned by the parties.
On appeal, the petitioner insisted that the
money used to purchase the subject properties
came from his own capital funds and that they
were registered in the name of his former wife
only because of the constitutional prohibition
against foreign ownership.
Issue: WON the petitioner can assert claiming a
right of half or whole of the properties subject
of this case.
Ruling: No. Undeniably, petitioner openly
admitted that he “is well aware of the
constitutional prohibition” and even
asseverated that, because of such prohibition,
he and respondent registered the subject
properties in the latter’s name. Clearly,
petitioner’s actuations showed his palpable
intent to skirt the constitutional prohibition.
Republic vs. CA
Facts:
The petitioners were both Filipino Citizens when
they bought the land in controversy from its
former owner. They had been in open, public,
peaceful, and continuous, exclusive, and
notorious possession and occupation of the two
adjacent parcels of land applied for registration
of title under a bonafide claim of ownership
long before June 12, 1945.
Petitioner had become a foreign national and
had been in possession of the land for more
than 30 years prior to the filing of the
application for registration.
Issue: WON a foreign national can apply for
registration over a parcel of land that they
purchased while they were still citizens of the
Philippines, from a vendor who has complied
with the requirements for registration under the
Public Land Act
Ruling: Yes, For the purpose of transfer and/or
acquisition of a parcel of residential land, it is
not significant whether private respondents are
no longer Filipino citizens at the time they
purchased or registered the parcels of land in
question. What is important is that private
respondents were formerly natural-born citizens
of the Philippines, and as transferees of a
private land, they could apply for registration in
accordance with the mandate of Section 8,
Article XII of the Constitution.
Manila Prince Hotel v. GSIS
Facts:
Pursuant to the privatization program of the
government, Respondent Government Service
Insurance System (GSIS) decided to sell through
public bidding shares of the Manila Hotel. There
were two entities who participated in the
bidding: Petitioner Manila Prince Hotel (MHC), a
Filipino corporation, which offered to buy the
shares at ₱ 41.58 per share, and Renong
Berhad, a Malaysian firm, which bid for the
shares at ₱ 44.00 per share. Eventually, MHC
matched the bid price of Renong Berhad at ₱
44.00 per share.
MHC even sent a manager’s check to GSIS which
the latter refused. Apprehensive about the GSIS’
refusal, MHC filed a petition for prohibition and
mandamus before the Supreme Court invoking
Article XII Section 10 Paragraph 2 (commonly
known as the “Filipino First Policy”).
Issue: WON Article XII Section 10 Paragraph 2 of
the Constitution may be invoked as a self-
executing provision.
Ruling: Yes. The Supreme Court ruled in the
affirmative. It admits that a provision that lays
down the basic principle, such as those found in
Art. II of the Constitution is usually not self-
executing. However, the Court also held that a
provision that is complete in itself and becomes
operative without aid of an enabling legislation,
or that which supplies sufficient rule by means
of which the right it grants may be enjoyed or
protected, is self-executing.
Thus, a constitutional provision is self-executing
if the nature or extent of the right conferred and
the liability imposed is fixed by the constitution
itself. Par. 2, Sec. 10, Art. XII of the Constitution
is a mandatory, positive command, which is
complete in itself and requires no further
implementing laws for its enforcement. Thus, it
may be invoked by MHC in the present case.
Army and Navy Club vs. CA
Facts:
Petitioner entered into a lease contract with
private respondent. In said lease contract, it
agreed to:
1. pay an annual a rent of P250,000.00
with a 10% increase every two years.
2. pay the realty tax due on the land.
3. construct a modern multi-storey hotel
provided for therein within five years
which shall belong to the City upon
expiration or termination of the lease
without the right of reimbursement for
the cost of construction.
Petitioner failed to pay the rents for 7
consecutive years and ftailed to erect a multi-
storey hotel in the site.
For violations of the lease contract, the City of
Manila tiled the action for illegal detainer and
demand petitioner's eviction from the premises
Issue: WON the contract of lease executed by
the City of Manila in favor of the petitioner is
void given that the property is of public domain.
Ruling: No. Having admitted in the original
answer that the City of Manila is the registered
owner of the property and recognizing herein
private respondent's title over the leased
premises and entering into a lease contract and
other covenants.
Tanada vs. Angara
Facts:
Petitioners assailed the constitutionality of the
Philippines acceding to the World Trade
Organization. WTO’ through its provisions
require that nationals and other member
countries are placed in the same footing in
terms of products and services. Petitioner
claimed that the aforementioned provision is
violative of the provisions of Section 10 and 12
of Art 12 of the 1987 Constitution which are
supposed to give preference to Filipino workers
and economy.
Issue: WON the provisions of the WTO
Agreement contravene Section 10 and 12 of
the 1987 Constitution.
Ruling: No. Sections 10 and 12 of Article XII
(National Economy and Patrimony) should
be read in relation to Sections 1 and 13
(promoting the general welfare). Also,
Section 10 is self- executing only to “rights,
privileges and concessions covering national
economy and patrimony” but not every
aspect of trade and commerce. There are
balancing provisions in the Constitution
allowing the Senate to ratify the WTO
agreement. Which includes, WTO
Recognizes Need to Protect Weak
Economies, Specific WTO Provisos Protect
Developing Countries, and Constitution
Does Not Rule Out Foreign Competition.
J.G. Summit Holdings vs. CA
Facts:
The National Investment and Development
Corporation (NIDC) and Kawasaki Heavy
Industries formed a Joint Venture
Agreement (JVA) for the shipyard business
PHILSECO, with a shareholding of 60-40%,
respectively.
NIDC's interest was later transferred to the
National Government. Pursuant to President
Aquino’s Proclamation No. 5, which
established the Committee on Privatization
(COP) and Asset Privatization Trust (APT
Kawasaki was allowed to choose a company,
in which it held stockholdings, to outbid JG
Summit Holdings for PHILSECO. JG Summit
protested, arguing that this action would
increase Kawasaki’s interest in PHILSECO, a
shipyard deemed a public utility, thereby
violating the Constitution
Issue: WON Kawasaki/PHI can purchase
beyond 40% of PHILSECO’s stock.
Ruling: No. As a shipyard, PHILSECO is
classified as a public utility, is subject to the
provisions of Article XII of the Constitution.
This article dictates that franchises for
public utilities can only be granted to
Filipino citizens or corporations with at least
60% Filipino ownership.
The State encourages equity participation
by the general public, limiting foreign
investors' participation in the governing
body to their proportionate share in its
capital, and requiring all executive and
managing officers to be Filipino citizens.
Bagatsing vs. Committee on Privatization
Facts:
Pursuant to the government’s privatization
program launched by the Aquino
administration, Pres. Ramos approved the
privatization of PETRON. There were three
interested offerors to the bidding: Petroliam
Nasional Berhad (PETRONAS), ARAMCO and
WESTMONT.
The PNOC Board of Directors rejected the
bid of WESTMONT for not having met the
prequalification criteria before even
opening the bids. PETRONAS was also later
disqualified for submitting a bid below the
floor price. ARAMCO qualified and
submitted a bid above floor price. They
were thus declared the winning bidder.
Petitioners now claim there is a failure in
bidding in view of Circular No. 89-296 of the
Commission on Audit (COA) which provides that
“there is failure of bidding" when:
1. there is only one offeror; or
2. when all the offers are non-complying or
unacceptable.
Petitioners contend that PETRON is a public
utility, in which foreign ownership of its equity
shall not exceed 40%.
Issue: WON the business of oil refining is a
"public utility" within the purview of Section 11,
Article XII of the 1987 Constitution.
Ruling: A "public utility" under the Constitution
and the Public Service Law is one organized "for
hire or compensation" to serve the public,
which is given the right to demand its service.
PETRON is not engaged in oil refining for hire
and compensation to process the oil of other
parties.
Likewise, the activities considered as "public
utility" under Section 7 of R.A. No. 387 refer
only to petroleum which is indigenous to the
Philippines. Hence, the refining of petroleum
products sourced from abroad as is done by
Petron, is not within the contemplation of the
law.
Albano vs Reyes
Facts:
The Philippine Ports Authority (PPA) held a
public bidding g of the development,
management and operation of the Manila
International Container Terminal (MICT) at the
Port of Manila.
Rainerio Reyes, then DOTC secretary, declared
the ICTSI consortium as the winning bidder.
The petitioner assailed the award of the MICT
contract to the ICTSI by the PPA. The petitioner
claims that since the MICT is a public utility, it
needs a legislative franchise before it can legally
operate as a public utility, pursuant to Article
12, Section 11 of the 1987 Constitution
Issue: WON a franchise is needed for the
operation of the MICT.
No. Even if the MICP is considered a public
utility, its operation would not necessarily need
a franchise from the legislature because the law
has granted certain administrative agencies the
power to grant licenses for or to authorize the
operation of public utilities. Reading E.O. 30 and
P.D. 857 together, it is clear that the lawmaker
has empowered the PPA to undertake by itself
the operation and management of the MICP or
to authorize its operation and management by
another by contract or other means, at its
option.
PAGCOR vs. BIR
Facts:
The Philippine Amusement and Gaming
Corporation (PAGCOR) assailed the validity of
R.A 9337, amending Section 27 of the National
Internal Revenue Code (NIRC). The amendment
omitted PAGCOR from the list of government
owned or controlled corporations, consequently
eliminating its exemption from income taxes.
Bureau of Internal Revenue (BIR) issued
Revenue Memorandum Circular (RMC) No. 33-
2013, subjecting PAGCOR to a corporate income
tax which will be derived from the income of its
operations and licensing of gambling casinos,
gaming clubs, gaming pools, and other similar
recreation and amusement parks.
PAGCOR requested a consideration, but the BIR
commissioner denied this. PAGCOR now
contends that RMC No. 33-2013 is an erroneous
application of the law, because under their
charter (P.D. 1869 as amended by R.A. 9487),
they can only be subjected to 5% franchise tax
from related services. The BIR however
contends that P.D. 1869 is already deemed
repealed because of R.A. 9337.
Issue: Whether or not PAGCOR’s charter (P.D.
1869 as amended) is deemed repealed or
amended because of R.A. 9337.
Ruling: No, In this case, there is no real conflict
between P.D. 1869 as amended and R.A. 9337.
The former lays down the taxes imposable upon
petitioner, which includes a 5% franchise tax of
the gross revenues or earnings derived from its
operations. The enactment of R.A. No. 9337,
which withdrew PAGCOR’s income tax
exemption under R.A. No. 8424, only reinstated
their liability for such tax.
There is also no express repeal of P.D. 1869
under the repealing clause of R.A. 9337. Hence,
P.D. 1869 should not be deemed impliedly
repealed as well, seeing that it is not in conflict
or irreconcilable with the provisions of R.A.
9337.